Most readers of Board Agenda will be aware of the concepts of “purposeful” or “stakeholder oriented” businesses. Indeed, any misunderstanding of the issues is less likely to result from unfamiliarity with the terms, than from confusion over which grand initiative on the topics is backed by which august institutions and celebrated public figures.

A non-exhaustive summary from the UK alone might include The Purposeful Company project supported by the likes of former Barclays CEO Jes Staley and Unilever’s Alan Jope; The Future of the Corporation programme at the British Academy; or the Better Business Act coalition of 900 businesses promoting a business culture that serves the interests of workers, customers and wider society rather than prioritising returns to shareholders above all else.

So how’s progress? Recent responses by BP and Shell to proposals for a windfall tax on companies who have enjoyed outsized profits in the aftermath of the pandemic show how dramatic the change in boardroom culture hasn’t been.

Windfall tax

Over the past fortnight both companies’ CEOs have spoken out vehemently against the idea of a windfall tax, on the grounds that it would hurt their investment in clean energy.

BP and Shell have not been the most prominent cheerleaders for purposeful businesses, but they do both include sections on purpose in their annual reports of the kind that have become typical in recent years.

BP says it wants to help reach net zero and improve people’s lives. Shell states that it powers progress together by providing more and cleaner energy solutions. Their more detailed discussion of purposeful business sets out how they generate value for all stakeholders, including shareholders customers and wider society.

The companies’ argument that the windfall tax would hurt investment holds little weight, considering that they have paid nearly £150bn in dividends and buybacks over the past decade. BP and Shell could still easily afford to maintain and indeed increase green investment in the event of a windfall tax, by reducing the pile of surplus cash that they return to their shareholders.

That’s billions of pounds going either to schools, hospitals and those hit by the cost of living crisis, or to BP and Shell’s investors—at a time when recent research shows that UK pension funds now account for just 6% of UK shareholdings and private share ownership is overwhelmingly the preserve of the rich.

No change in mentality

It is clear which delivers the greater value for society. CEOs of truly purposeful businesses ought to be happy to pay a higher rate of tax in a bonanza year, knowing that their company’s wealth is being used to deliver direct improvements to people’s lives.

The Shell and BP cases show that this change in mentality isn’t taking root, despite the undoubtedly worthwhile and well-intentioned efforts of the different initiatives dedicated to promoting such a change.

Whatever your view of the purposeful business agenda, this has important implications.

For advocates, the obvious task is understanding the obstacles to progress. The cynics must set out their alternative ideas for aligning the interests of business with wider society in a world falling short of the emissions reductions necessary to prevent dangerous climate change, while billionaire wealth multiplies as wages for ordinary workers stagnate.

Luke Hildyard is director of the High Pay Centre.